Cortland Savings and Banking Co. v. Platinum Rapid Funding Group, Ltd.

The Cortland Savings and Banking Company (Cortland Bank) (plaintiff) loaned 21st Century Concrete Construction, Inc. (21st Century) (debtor) $1 million. The loan was subject to a commercial security agreement, which gave Cortland Bank a security interest in several 21st Century assets, including a deposit account maintained by the bank. Later, Platinum Rapid Funding Group, Ltd. (Platinum) (defendant) advanced about $1.4 million to 21st Century. For repayment, Platinum was authorized to withdraw weekly amounts from 21st Century’s deposit account, and over the next year, $869,250 was transferred to Platinum in this manner. 21st Century later defaulted on its loan to Cortland Bank, and Cortland Bank obtained a $1 million judgment against 21st Century. Cortland Bank then brought an action against Platinum, seeking return of the funds transferred to Platinum from the deposit account. Cortland Bank’s allegations included conversion, impairment of a security interest, unjust enrichment, and tortious interference with contract. Cortland Bank also alleged collusion between 21st Century and Platinum. Both sides moved for summary judgment. The trial court denied Platinum’s motion and granted Cortland Bank’s motion with respect to conversion, impairment, and tortious interference. The court’s reasoning was that Cortland Bank had maintained a security interest in the deposit account’s funds. The court did not reach the issue of collusion. Platinum appealed to the Ohio Court of Appeals.